Arguably the most important step you need to understand is the escrow process. Without having an “independent third party” involved, how do you know that you are going to get the deed to the home once you fork over the money? An escrow company will hold your deposit and coordinate this activity to ensure the transaction goes over smoothly.
Since this service is beneficial to both you and the seller, you will both need to pay fees. Therefore, it is crucial that you and the seller agree on an escrow company to deal with. Ask your agent for a recommendation and do research on companies that can assist you in this process. It is customary that the buyer and seller split the decision between an escrow company and a title insurance company so that all is fair.
Title Insurance Company
Title Insurance companies provide you with an Owner’s Policy, which ensures that you have title to the home you plan on purchasing. The seller often pays for this service, so, chances are, they will want a say in which company you select.
You will have to pay a fee for this service as well, being as you will need a Lender’s Policy. This insures your mortgage lender that there no liens against the property and that the mortgage will be in first position. In layman’s terms, this means that if you sell the property, the mortgage gets paid first before any other claims, such as liens or judgments.
Termite and Pest Inspection
Another crucial service is termite and pest inspection. By having this service completed, you are checking for current issues with termites, along with any dry rot or water damage that may have occurred in the past. This is absolutely necessary in making sure you are getting your home in fair condition and you don’t have to deal with any problems that were not dictated in the agreement.